- Silvergate Bank announced last week that it would be delaying the filing of its annual 10-K due to questions from its independent auditors.
- Over the past week, its stock has fallen by 61%, with the majority of that decline occurring last Thursday, bringing its stock (SI) to $5.41.
- On Tuesday, Powell stated that the central bank is likely to raise rates more than initially anticipated.
- Bitcoin hit a three-week low on Wednesday as traders priced in a higher “terminal rate” in response to Jerome Powell’s hawkish testimony before Congress.
- More than 70% of traders now anticipate a 50 basis point rate increase at the FOMC meeting in March.
- On Monday, USDT’s stablecoin market share exceeded 54%, which is the highest share Tether’s stablecoin has attained since late November 2021.
- Tether’s gain mainly came at the expense of rival Binance USD, which has dropped below $9 billion from a market capitalization of $16 billion.
Bitcoin fell below $22,000 after US Federal Reserve Chair Jerome Powell stated in prepared remarks during his two-day semiannual monetary policy testimony before Congress that inflation remained unusually high. However, the largest cryptocurrency by market capitalization quickly recovered and traded above the threshold for the majority of Tuesday. BTC was recently trading around $22,000, down about 1% from the same time on Monday. Bitcoin has largely remained above $22,000, despite a flurry of new jobs and price indicators raising inflationary concerns.
The most recent economic data have been stronger than expected, implying that the ultimate level of interest rates will be higher than previously anticipated. Ether (ETH) has dropped 1% in the last 24 hours to trade around $1,550. The S&P 500 ended down 1.5%, while the Nasdaq Composite finished down +1+%. The Dow Jones led all of the major averages lower, closing at 32,850 after losing more than 550 points. The Nasdaq declined 145 points to close at 11,525 while the S&P 500 dropped 60+ points to close at 3,980. The final S&P 11 sectors all posted losses. Following the biggest daily increase in five months, the US Dollar Index (DXY) seesaws around the December 2022 highs, swinging to 105.60-65 in the early morning hours.
Following Powell’s most recent comments, the market now places a nearly 71% chance that the Fed will increase its benchmark rate by 50 basis points at its upcoming policy meeting later this month. The chances increased dramatically from the previous day when they were only about 31%. Only a month ago, the market believed there was a less than 10% chance of a move of 50 basis points. The market, however, is now convinced that the Fed will once again become more aggressive about raising interest rates due to a number of hot inflation statistics, indications of continued economic strength, and a steady stream of hawkish comments from Fed officials.
The market share of USDT stablecoin grows:
In the midst of ongoing disruption in the $136 billion stablecoin market, Tether’s USDT is becoming more dominant among stablecoins. The market share of USDT among stablecoins exceeded 54%, which is the highest market share for Tether’s stablecoin since late November 2021. According to CoinGecko data, USDT’s stablecoin market share surpassed 54% on Monday. This is the highest market share that Tether’s stablecoin has attained since late November 2021, when the cryptocurrency bull market peaked.
The majority of Tether’s gain came at the expense of competitor Binance USD, whose issuer Paxos announced on February 13 that it would cease issuing new BUSD tokens in response to pressure from the New York Department of Financial Services. BUSD’s market capitalization since that time has decreased from $16 billion to under $9 billion.
The market capitalization of USDT has increased this year by about $5.3 billion to $71.6 billion, with $3 billion of those gains occurring after mid-February. USD coin (USDC), a stablecoin that competes with Circle, has also increased by $3 billion since Paxos’ announcement, but its $44 billion market cap is still lower than it was at the beginning of 2023.
With a peak market capitalization of $188 billion in May 2022, stablecoins have grown to be the foundation of the cryptocurrency economy in recent years. They serve as a bridge between the world of central bank-issued fiat money and the world of digital assets by fixing their price to an external asset, such as the U.S. dollar, and facilitating trading on exchanges.
Bitcoin Price Analysis:
The fact that Bitcoin is having trouble rising back above $23,000 suggests that the bears are attempting to turn the level into resistance. The BTC/USDT pair may fall to the crucial support at $21,350 if the price declines from the current level. Bulls and bears may engage in a bloody battle on this level. If the bears prevail, the pair may continue to decline until it reaches the psychologically significant level of $20,000.
On the other hand, if the price moves back up from $22,800, the bulls will try again to pass the overhead resistance level at $23,000. If they are successful, the pair might begin their upward movement towards $24,150.
Concluding Thoughts:
The stock market continues its brief upward trend, while crypto investors await this week’s Federal Reserve statements before deciding the direction of BTC and altcoin prices. At the start of the new week, the United States equity markets are attempting to extend their recent recovery. The fact that the yield on the benchmark 10-year note has fallen to 3.924% is one factor that could be boosting investor confidence.
The cryptocurrency markets continue to underperform despite the bullish sentiment on the equity markets. Since March 4, Bitcoin has been trading within a narrow range, indicating that the next movement’s direction remains uncertain. Periods of low volatility are typically followed by periods of increased volatility. Based on inflation and rate hikes, Federal Reserve Chair Jerome Powell’s testimony to Congress on March 7 and March 8 was bearish for the markets. Later, on March 10, the February employment report could add to market volatility. The 2-year yield (US2Y), which increased 12 basis points to 5.02% in response to Powell’s testimony, shot sharply higher. The 2-year yield consequently exceeded 5% for the first time since 2007 as a result.
